Across the United States, children are headed back to school, which means teachers are stocking their classrooms. Thanks to the PATH Act, the Educator's Expense deduction is now permanent and teachers of kindergarten through twelfth graders are allowed a deduction of up to $250 spent on classroom supplies without having to itemize their deductions. To qualify, the expenses must be common for the grade level and subject taught and the teacher must work at least 900 hours. From dry erase markers to paperback books and things in between like prizes for games and sheet protectors, it can be deducted - up to $250. These things add up quickly and it isn't unusual for teachers to spend much more than $250 on classroom supplies, when this happens they can often deduct the additional expenses as part of their itemized deductions though there will be more limitations.
In addition to the Educator's Expense deduction, there are a few itemized deductions that a teacher may be able to use on their tax return to reduce their taxes. For example, sometimes a school needs more than casual supplies and a teacher will purchase a set of books or a piece of equipment and donate the item to the school. When this happens, they may be able to deduct the amount of the purchase as a charitable contribution. Other itemized tax deductions include union dues, books, and publications for professional development. As with any itemized deduction, teachers should keep receipts of the odds and ends they pick up for their classroom as well as records of donations and professional development items so they can include them when they do their taxes or give them to their Tax Pro.
Another handy itemized tax deduction is for teachers who work a second job or substitute somewhere other than their regular school. They may be able to deduct the mileage from one job to another. Usually, a teacher traveling from their home to their regular school is not deductible; however, if they have teaching obligations at more than one school, travel between schools is tax-deductible. In addition, unreimbursed travel to trainings, seminars, conventions, conferences, or other school-sanctioned events are tax-deductible teacher expenses. Meals and lodging for those events, however, is generally only tax-deductible if you are required to stay overnight for out-of-town travel.
For teachers, and others, taking classes for undergraduate, graduate, or professional degree courses, whether at a college or another eligible educational institution, the Lifetime Learning Credit allows a tax credit of 20% of tuition and fees up to $2,000 and you don't have to itemize to claim the credit. There are fantastic programs for teachers to have their loans forgiven or cancelled, but for teachers who are paying back their student loans may be able to deduct up to $2,500 a year of interest from qualified student loan repayments on their tax return.
For more information about the typical credits and deductions available for educators, see IRS Topic 458 - Educator Expense Deduction and the Educator Expenses section of IRS Publication 529. If you have concerns that aren't covered in the IRS information or other questions about your taxes, now is a great time to find a Tax Pro. Even if you do your own taxes, having a trusted expert who you can call to help you with a question or when a life change affects your tax situation is a good idea.
Though the school year is just beginning, the tax year is about three quarters over; save yourself some time - and stress - and get your records together now and plan for that big tax refund that I want you to get.